CHINA/FILE: China and Taiwan sign a historic pact to give a major boost to bilateral trade, after decades of hostility
Record ID:
1519273
CHINA/FILE: China and Taiwan sign a historic pact to give a major boost to bilateral trade, after decades of hostility
- Title: CHINA/FILE: China and Taiwan sign a historic pact to give a major boost to bilateral trade, after decades of hostility
- Date: 30th June 2010
- Summary: HONG KONG, CHINA (JUNE 29, 2010) (REUTERS) DAVID ZWEIG, DIRECTOR OF THE CENTER ON CHINA'S TRANSNATIONAL RELATIONS AT THE HONG KONG UNIVERSITY OF SCIENCE AND TECHNOLOGY TALKING (SOUNDBITE) (English) DAVID ZWEIG, DIRECTOR OF THE CENTER ON CHINA'S TRANSNATIONAL RELATIONS AT THE HONG KONG UNIVERSITY OF SCIENCE AND TECHNOLOGY SAYING: "They recognise politically the people of Taiwan still generally mistrust the Communist Party and the way that they can win over their hearts and be able to move deeper into deeper integration between Taiwan and the mainland is through economic cooperation. And so they're willing to give up part of their market." ZWEIG TALKING (SOUNDBITE) (English) DAVID ZWEIG, DIRECTOR OF THE CENTER ON CHINA'S TRANSNATIONAL RELATIONS AT THE HONG KONG UNIVERSITY OF SCIENCE AND TECHNOLOGY SAYING: "I think for them it's really much more political which is this just leads to closer ties between the mainland and Taiwan, where their agenda is at least keeping the status quo if not in the long run moving towards independence."
- Embargoed: 15th July 2010 01:34
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- Topics: Information
- Reuters ID: LVA7HTTDXZ6D02GTBOIYV7U1DUPR
- Aspect Ratio: 4:3
- Story Text: China and Taiwan signed a historic deal in the Chinese city of Chongqing on Tuesday (June 29) to boost $100 billion in two-way trade after decades of hostility, easing political ties while putting the export-reliant island closer to its biggest market.
The tariff-slashing Economic Cooperation Framework Agreement (ECFA) follows 60 years of antagonism that has brought the two brink of war.
The pact, talks on which began in 2008 under China-friendly Taiwan president Ma Ying-jeou, covers only the easiest 800 of thousands of items targeted for eventual tariff cuts to lift $100 billion annual two-way trade.
Huang Ching-hsun, Chairman of Taiwan Business Association in Chongqing said the trade pact would be conducive to the cross-strait ties and business in Taiwan.
"In terms of the future, this will be the best step in expanding the relations between the two sides of the Taiwan Straits. It is wrong to say that it would only be of benefit to trade. People ask me whether my project is included in the deal, but I think it is wrong to think in such narrow terms, because most products involves more than just one industry," said Huang.
The pact will cut tariffs to zero on 539 Taiwan export items worth $13.84 billion bound for China versus only 267 valued at $2.86 billion headed the other way.
Exporters will do cheaper business in China, already Taiwan's biggest trade partner and top investment destination, as the tariffs disappear two years after the deal signing in Chongqing, a former wartime capital for Taiwan's ruling Nationalists party.
David Zweig, director of the Centre of China's Transnational Relations at Hong Kong University of Science and Technology, said China hopes to use the pact to win over Taiwan people's trust.
"They recognise politically the people of Taiwan still generally mistrust the Communist Party and the way that they can win over their hearts and be able to move deeper into deeper integration between Taiwan and the mainland is through economic cooperation. And so they're willing to give up part of their market," he said.
Analysts say Beijing wants the trade deal less for its economic benefits than as a way to charm Taiwan into political reunification with China.
Many in Taiwan have been opposing the deal, claiming that Communist China is using it to make an push for political unification.
Zweig called such reaction in Taiwan a political movement by the opposition party.
"I think for them it's really much more political which is this just leads to closer ties between the mainland and Taiwan, where their agenda is at least keeping the status quo if not in the long run moving towards independence," said Zweig.
The next round could start as soon as December, when Taiwan will push its economic powerhouse neighbour to lower tariffs on the island's most prized exports, such as PVC plastics and high-tech items. Beijing is seen resisting to protect its own industries.
Future talks, also covering sensitive Taiwan-made autos and machine tools, will make up what Ma has described as a "post-ECFA era," crucial to an island with almost no free trade deals as China marginalises it internationally.
China and Taiwan have been ruled separately since defeated Nationalist, or Kuomintang, forces fled to the island at the end of a civil war in 1949.
Beijing claims sovereignty over the island, and insists it must eventually be reunified with the mainland.
Ties have improved radically, however, since Ma won election in 2008, and ECFA is the most significant and wide-ranging agreement yet between two sides who once stood poised for war. - Copyright Holder: REUTERS
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